BP has agreed to pay $7.8 billion (£4.9bn) to 110,000 businesses and individuals affected by the Gulf of Mexico disaster in April 2010.
Despite this the US Department of Justice is expected to press ahead with its own $18 billion lawsuit against the British oil giant.
BP reached the settlement for financial and and medical claims stemming from the Deepwater Horizon accident and oil spill with the Plaintiffs’ Steering Committee (PSC) on Friday.
Bob Dudley, BP Group CEO said: “The proposed settlement represents significant progress toward resolving issues from the Deepwater Horizon accident and contributing further to economic and environmental restoration efforts along the Gulf Coast.
“This settlement reflects our commitment not only to the Gulf region, but also to the United States as a whole.”
BP is the second largest oil and gas producer in the USA.